On the French protests -- what are they really about? It's not just preserving the job security of the privileged. It's about what kind of society and economy France is going to have:

Capitalism Under Fire

The crowds in the street contest a certain form of capitalist economy that a large part, if not the majority, of French society regards as a danger to national standards of justice and, above all, to "equality" - that radical notion of which France is nearly alone in proclaiming as a national cause, the central value in its republican motto of "liberty, equality, fraternity."

The essential question is, what capitalism are we talking about? Since the 1970s, two fundamental changes have been made in the leading (American) model of capitalism.

The first is that the "stakeholder," post-New Deal reformed version of capitalism (in America) that prevailed in the West after World War II was replaced by a new model of corporate purpose and responsibility.

The earlier model said that corporations had a duty to ensure the well- being of employees, and an obligation to the community (chiefly but not exclusively fulfilled through corporate tax payments).

That model has been replaced by one in which corporation managers are responsible for creating short-term "value" for owners, as measured by stock valuation and quarterly dividends.

The practical result has been constant pressure to reduce wages and worker benefits (leading in some cases to theft of pensions and other crimes), and political lobbying and public persuasion to lower the corporate tax contribution to government finance and the public interest.

In short, the system in the advanced countries has been rejigged since the 1960s to take wealth from workers, and from the funding of government, and transfer it to stockholders and corporate executives.

Are corporations simply going to be vehicles for enrichment of top executives and shareholders? Or are we going to reform them so that they operate in the interests of all? It's the difference between opportunism and enlightened self-interest.

Pfaff has a second column that warns what not to do:

Deregulation Gone Mad

A man who played a key role in the deregulation of the U.S. airline industry in 1980, Tom Allison, at the time chief counsel to the U.S. Senate Commerce Committee, says that if senators had known then what they know now about airline deregulation, they would never have passed the measure.

Allison says that by lifting restrictions on airline competition, and on where airlines could fly, Congress unintentionally created unending disruption and cost to both industry and consumers, with gross accompanying inefficiencies.

In an interview given to the International Herald Tribune in February, intended to influence the current debate in Europe over airline deregulation, he said the human and other costs of U.S. airline deregulation outweighed benefits to consumers . . .

Some of the costs of airline deregulation in the U.S. include:

• Small-city air service, typically provided in the United States by single carriers, has greatly increased in cost, or has simply been abandoned;

• Cut airline salaries, slashed retirement benefits, forced job cuts;

• Bankrupted many formerly great airlines or forced them into bankruptcy protection;

• Ruined standards of airline service;

• Raised fares on most non-mainline services;

• Resulted in a "massive shift of airline debt to the public," via a federal corporation established to pay the pensions (or a part of them) of the employees of airlines driven out of business or forced into bankruptcy.

. . . an example of the economic and human harm that has been caused in recent years by unthinking submission to the prevailing ideologies of deregulation and privatization.

What needs to be done? In the U.S. context there are some very good proposals here:

Will Your Job Survive?

So, here are three immodest suggestions:

• We need to entice industry to invest at home by having the government and our public- and union-controlled pension funds upgrade the infrastructure and invest in energy efficiency and worker training.

• We need to unionize and upgrade the skills of the nearly 50 million private-sector workers in health care, transportation, construction, retail, restaurants and the like whose jobs can't be shipped abroad.

• And, if America is to survive American capitalism in the age of globalization, we need to alter the composition of our corporate boards so that employee and public representatives can limit the offshoring of our economy.

Taming Global Capitalism Anew

One of the greatest achievements of the twentieth century was a social contract that provided far more economic security and prosperity for working Americans than had existed in any previous period. But successive waves of changes in the world economy, together with the ascendancy of a strain of economic philosophy that puts the freedom of capital above the interests of society, have placed enormous strain on the postwar social contracts of all Western countries, resulting in stagnating wages, greater insecurity and levels of income and wealth inequality not seen since the early 1900s. And even more far-reaching challenges arising from the current pattern of globalization, with its emphasis on the outsourcing of service as well as manufacturing jobs, may lie ahead.

Developing a strategy for taming global capitalism anew therefore constitutes the overriding challenge of our time.

Some proposals:

• Make taxation more progressive in order to offset the economic forces increasing inequality;

• A redesign of our unemployment insurance program to make it more of an integrated lifetime social insurance program;

• A true commitment to full employment;

• Enhancing savings among lower-income individuals, including by matching grants;

• Enhancing public investment in research, education, technology and infrastructure;

• Fight for workers' rights to form unions and bargain for decent wages and working conditions;

• Affordable and equitable healthcare and retirement security systems that do not create competitive disadvantages for domestic companies;

• A complete overhaul of our corporate tax system to address its subsidies to the offshoring of jobs;

• Global trade rules need to be rewritten to insure that workers have a voice at their workplaces and in national political debates;

• Support for open-sourcing, the public dissemination of knowledge and the fair distribution of access to information;

• Trustbusting against excessive corporate power;

• Introduction of nationwide vote-by-mail (the Oregon system) to ensure elections where all votes are cast and counted;

• A high minimum wage;

• Crackdowns on international tax havens and the arms trade;

• A stabilizing international financial system and an end to the debt peonage of poor countries;

• A North American Bill of Rights . . . that would reassert the primacy of civil protection of individuals and democratic government over the extraordinary privileges NAFTA gives to corporate investors.

• A New North American Continental Deal, in which Canada and the United States commit substantial long-term aid to Mexico while Mexico commits to policies that assure a wider distribution of the benefits of growth.

• A North American Continental Development Strategy that shifts the economic policy objectives of all three countries to greater industrial self-sufficiency, resource conservation and increased investment in health and education.

• A progressive North American Customs Union would manage modest levels of balanced trade with the rest of the world.

• Worker-training and skill-certification programs that increase productivity while capturing it in income;

• Use of union pension funds to stabilize and grow distressed local economies while generating returns on investment;

• "Smart growth" policies that reduce commuting times and lower real housing costs while improving the environment;

• Living-wage and allied efforts to raise standards on company performance while increasing productivity;

• The Apollo Alliance program for good jobs and energy independence;

• Add value in communities and regions by improving education and worker training; increasing research and commercialization capacity; providing the marketing, financial and other business services that are beyond the capacities of individual firms; and helping to cluster firms to realize complementary strengths while enlisting workers in their upgrading;

• Reduce waste by establishing markets and making direct investment in renewable energy and more resource-efficient--and, with accurate accounting, much cheaper--energy, housing, transportation and consumer durables;

• Improve government efficiency by democratizing elections, applying the private sector's metrics revolution to its operations and engaging citizen organizations in open-source problem-solving and regulatory enforcement.

• A new international monetary regime that can open access to international trade and investment for all nations on equal terms by allowing all currencies to be used in cross-border as well as domestic transactions.

• A resumption of the demand-led growth policies that are a necessary support for a new, global social contract.

Europe is already doing some of these things, and should keep doing them and not allow institutions like strong labor unions, codetermination, and social partnership to be dismantled. There may be other ideas here that can be applied to Europe as well. There are further things - reforms of international economic institutions - that we must do together.